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Serbia's c-bank may cut key rate this week - Erste

Author Radomir Ralev
Serbia's c-bank may cut key rate this week - Erste By NMedjedov (Own work), via Wikimedia Commons

BELGRADE (Serbia), July 9 (SeeNews) - Serbia's central bank, NBS, may lower the key repo rate at its monetary policy meeting on July 11 in order to ease appreciation pressure on the local currency, Erste Group said.

"Appreciation pressure on the Serbian dinar, which has been mitigated by central bank interventions in recent weeks, could be a reason why the central bank might opt for a rate cut," the Austria-based banking group said on Monday.

In January, Erste analysts said they expected NBS to hold the policy rate unchanged for most of 2019, as the expected slowdown of economic growth in the eurozone in 2019 could impact ECB’s planned hike tempo, shaping a prolonged period of lax local monetary policy.

Serbia's central bank last cut the repo rate by 0.25 percentage points to 3.25% in March 2018 and further down to 3.0% in April 2018 to help guide inflation to the target band.

Тhe country's average annual consumer price inflation slowed to 2.2% in May, from 3.1% in April, the national statistical office said last month.